From purchase plans to emerging trends, we’re examining the state of server hardware in the workplace.

In our constantly-connected digital world, server infrastructure is incredibly important to businesses and individuals everywhere. After all, behind the scenes, servers (whether hosted locally, or in a cloud or edge data center) power websites, business software, mobile apps, and the online services we all depend on.

And while cloud-based infrastructure and services get a lot of buzz (our State of IT Budgets report shows businesses are spending more than 20 percent of their IT budgets on them), Spiceworks research also shows the current reality is 98 percent of businesses are running their own server hardware on-premises. But what server brands are organizations using, and will businesses continue to buy server hardware for the foreseeable future?

To better understand how and why businesses buy servers, what components will go into them, and which server trends may shift the market, Spiceworks surveyed more than 500 IT decision makers in businesses across North America and Europe.

Server Purchase Plans

According to our research, 36 percent of organizations plan to purchase new server hardware within the next 12 months, and an additional 25 percent plan to buy servers within the next one to two years. Only 15 percent of organizations have no current plans to buy servers.

Breaking the data down by company size, we found enterprises are most likely to purchase new physical servers in 2019: 68 percent of enterprises (1,000+ employees) plan to buy servers within the next 12 months, compared to 34 percent of mid-size companies (100 to 999 employees), and 30 percent of small businesses (1 to 99 employees).

Server Buying Behavior

When purchasing new hardware, businesses have options: buy directly from the manufacturer, through the channel, or some combination of both. According to our data, nearly half (48 percent) of businesses planning to purchase new servers will buy them directly from a manufacturer, while 38 percent plan to go through a value-added reseller (VAR), 26 percent plan to purchase through an online retailer (e.g., Newegg, Amazon), and 18 percent plan to buy through a managed services provider (MSP). And perhaps it’s a sign of the times that only 1 percent of companies plan to buy servers at a brick-and-mortar retail store.

Looking at purchasing behavior by company size, we found that enterprises are just as likely to purchase servers through a VAR than through the manufacturer. Conversely, smaller companies, which often have less access to specialized IT expertise, are more likely to seek out assistance from an MSP compared to their larger counterparts. We also found that mid-size companies — typically with more access to IT expertise but often price sensitive — are the group most likely to purchase servers via an online retailer.

Additionally, prior research has told us that more often than not, companies tend to opt for higher-end, higher-margin servers when buying new — which is good news for hardware manufacturers and resellers.

Server Purchase Drivers

In our survey, we also examined which factors influence businesses to purchase new server hardware. But before we dive in, it’s important to note who the decision makers are when it comes to buying servers. According to our State of IT Budgets report, IT decision makers (e.g., CIOs, IT directors, IT managers) are twice as likely to be the sole decision makers for server hardware purchases compared to business decision makers (e.g., COOs, business line directors, finance managers). When they are involved, BDMs are more likely to step in later in the purchase process, either signing the check or vetoing the deal after ITDMs have made the initial vendor selection.

So according to IT decision makers, what prompts businesses to purchase new servers? Among organizations planning to buy server hardware, our research shows company growth (50 percent) is the top reason for new purchases, followed by performance degradation (38 percent), maintenance costs of aging hardware (38 percent), and reliability issues (34 percent). And with Microsoft dropping extended support for Windows Server 2008 on January 14, 2020, it’s no surprise that server OS end of life is prompting nearly one-third of organizations to purchase new servers.

When breaking down the data by company size, we found that enterprises are more likely to purchase new servers due to company growth. They’re also more likely to buy new servers on a schedule outlined in a corporate tech replacement policy. Conversely, the smallest businesses, which also tend to have the smallest IT budgets, are more likely to use their server hardware until the bitter end, waiting until hardware failure or reliability issues prompt new server hardware purchases.

Server Brand Prevalence

Now that we understand organizations’ purchase plans, let’s dive into which server hardware brands are used in the workplace. Among organizations surveyed, our research shows servers from Dell Technologies are the most widely used: 68 percent of organizations are currently using Dell servers on-premises, followed by Hewlett-Packard Enterprise (HPE) at 46 percent. Additionally, 15 percent of organizations currently use Cisco servers, 12 percent use IBM servers, and 9 percent use Lenovo servers.

While popular in Asia, only 1 percent of businesses represented in our survey — which covers organizations in North America and Europe — use Huawei servers. Finally, 15 percent of companies currently use other, unspecified server brands, which could include custom-built “white box” servers or perhaps less expensive, no-frills brands such as Super Micro.

Obviously, server hardware is not one-size-fits-all, and brand preferences can vary greatly by company size. While Dell is the king of server rooms in SMBs, enterprises with 1,000+ employees are more likely to use HPE servers. Enterprises are also more likely to use Cisco, IBM, and Lenovo servers than their smaller peers. The data also indicates enterprises often use a mix of server brands from multiple vendors, while SMBs primarily stick with Dell and HPE for their server hardware needs.

Server Brand Perceptions

To better understand why businesses choose certain server manufacturers, we examined which attributes (e.g., value for money, performance) IT professionals associate with the server hardware brands their business is using or planning to use. After polling IT professionals to understand which attributes are most important when evaluating new server purchases, they told us reliability is of the utmost importance, followed by value for money, quality support, ease of management, security, performance, and relevant product offerings for their business size.

It comes as no surprise that Dell Technologies — the most commonly used server hardware brand — ranks the highest for value for money, quality support, and ease of management (three of the most important attributes). HPE also received high marks across the board. But when it comes to reliability (the most important attribute), IBM leads the pack, just slightly above Dell and HPE. IBM, which is more commonly used in enterprises, also ranked the highest for performance, but ranked fairly low for attributes such as value for money and ease of management. Cisco scored high marks for reliability and performance, but ranked the lowest for value for money.

Additionally, Lenovo scored relatively well in value for money, but in the wake of a U.S. government cybersecurity warning involving the manufacturer, the brand scored the lowest for security. Of note, there’s no one clear brand leader when it comes to security, considering one-third of IT professionals didn’t associate any server brand with this attribute. This indicates a market opportunity for server manufacturers to rise above competitors by building a reputation for security features and capabilities.

Emerging Server Trends

With technology, change is the only constant. Therefore, it’s important to stay up to date on emerging trends in the server hardware space, including the emergence of hyperconverged infrastructure and the adoption of procurement models such as hardware-as-a-service. But first, let’s discuss how some of the core technologies inside servers might change in the coming years. For example, with both server CPUs and storage, we’re seeing important shifts.

AMD gains ground on Intel

For years, Intel has dominated the server processor market. And according to our data, their processors are still by far the most commonly used in on-premises server hardware. Currently, 93 percent of organizations use Intel server processors, while 16 percent use AMD processors, and only 4 percent use ARM.

However, according to our research, AMD is expected to gain some ground in the coming years, with adoption of their server processors expected to grow from 16 percent today to 21 percent within the next two years.

In terms of usage by company size, our data also indicates AMD has made more headway in enterprises than in SMBs. Currently, 27 percent of enterprises use AMD, compared to 17 percent of mid-size companies and 11 percent of small businesses.

To better understand predicted trends such as the rise of AMD, we examined which attributes IT pros associate with the CPU brands their business is using or planning to use. While Intel scored top marks in most categories — including ease of management, high performance, relevant products, and energy efficiency — Intel and AMD ranked similarly in the most important attribute, reliability.

Perhaps even more importantly, AMD scored much higher marks than Intel for the second most important attribute, which is value for money. In fact, AMD nearly scored twice as high: 77 percent of IT pros associate AMD with “value for the money” while only 43 percent associate Intel with this attribute. This finding, combined with buzz around AMD’s EPYC processor and AMD’s future 7nm processor roadmap may explain why more businesses are willing to give AMD a try going forward.

Adoption of SSDs in servers soars

For the past decade, adoption of solid-state drives (SSDs) has been gaining ground in businesses because using these speedy alternatives to spinning hard drives has been viewed as a solution to alleviate storage bottlenecks, which can slow down otherwise high-performing computers. Although early generations of SSDs were held back by high prices and long-term reliability issues, SSD technology has improved in recent years, and the price per megabyte of flash storage has fallen dramatically to the point that it’s now competitive with traditional hard drives.

But are SSDs ready for the server room, where uptime is critical? According to our research, many businesses think so. In fact, 62 percent of businesses use SSDs in their on-premises physical servers today, and that number is expected to increase to 72 percent by 2020. Currently, among businesses using local SSDs in on-prem servers, 51 percent are using SATA SSDs, 34 percent are using faster SAS SSDs, and 13 percent are using even faster NVMe SSDs.

SSDs are also increasingly finding their way into external storage. Currently, 18 percent of businesses use hybrid storage arrays that make use of both SSDs and spinning hard drives, while 14 percent use all-flash storage arrays. However, as SSDs become more popular, we expect usage of all-flash storage arrays to surpass use of hybrid flash arrays within the next two years.

Our data also shows the adoption of hybrid drives — which combine flash storage and spinning hard drive technology to provide some benefits of flash storage at a reasonable price — is expected to level off in the coming years, now that SSD prices have come down.

Hyperconverged infrastructure poised to go mainstream

One particularly buzzworthy technology has been making waves in the world of on-premises server hardware in recent years. Hyperconverged infrastructure (HCI) solutions offer the promise of a single turnkey solution that combines server, storage, networking, and virtualization technology in a scalable, easy-to-manage package. But how common is HCI in the workplace?

According to our survey, 46 percent of organizations plan to use hyperconverged infrastructure solutions by 2020, up from 38 percent today. Among organizations using HCI, Dell EMC’s VxRail and VxRack products are most common: 27 percent of organizations are currently using VxRail or VxRack — a figure likely bolstered by Dell’s acquisition of VMware’s parent company, EMC, in 2015. Additionally, 3 percent of organizations are using HPE SimpliVity, Nutanix, and Cisco HyperFlex. Only 2 percent of organizations use Scale Computing HC3 and NetApp HCI, and only 1 percent use Pivot3.

Perhaps because getting started with HCI can be an expensive proposition for organizations with smaller IT budgets, adoption of HCI solutions is often higher in larger organizations. For example, 35 percent of enterprises (1,000+ employees) reported using a Dell EMC HCI solution. Additionally, 8 percent of enterprises currently use Nutanix HCI solutions, and an additional 4 percent plan to within the next two years. Finally, 6 percent of enterprises currently use Cisco HyperFlex.

Although adoption of most HCI solutions is fairly low among SMBs, Dell EMC still does well in smaller organizations. According to our data, Dell EMC HCI solutions have a 31 percent adoption rate in mid-size companies (100 to 999 employees) and a 19 percent adoption rate in small companies (less than 100 employees).

Hardware-as-a-service-market opportunities grow

According to a separate Spiceworks survey, few companies are currently tapping into a hardware-as-a-service (HaaS) model — which combines a lease agreement bundled with managed services — when it comes to servers. In fact, only 8 percent of companies currently lease their servers, and only 3 percent plan to within the next two years. Among that small group, only 17 percent procure their servers through an “as-a-service” model. But that figure is expected to grow to 24 percent by 2020.

In other words, server HaaS adoption is slowly growing, so usage of this buzzworthy offering isn’t ready to take off yet. And from our data, we know that many businesses are hesitant because of concerns about the cost effectiveness of an “as-a-service” model and giving up some control over their servers. But if tech brands can better address those two issues head on, there will likely be more opportunity for growth.

The next few years for server hardware

Despite a shift of many workloads to the cloud, on-premises physical servers will continue to be vital to the overwhelming majority of businesses. But how and why companies buy server hardware depends largely upon company size, business growth, and events such as Windows Server 2008 end of service.

Looking forward, servers will continue to evolve. As the processor wars between Intel and AMD heat up once again, businesses will have access to more viable options thanks to competition. And IT departments can look forward to continued advancements in storage technology that should put faster disk performance in reach of more organizations. Finally, the hyperconverged infrastructure trend that consolidates IT infrastructure will continue to grow, inching closer to mainstream adoption in the coming years.

Methodology

The Spiceworks survey was conducted in February 2019 and included 530 IT buyers from organizations across North America and Europe. Respondents represent a variety of company sizes, including small-to-medium-sized businesses and enterprises, and a variety of industries, including manufacturing, healthcare, nonprofits, education, government, and finance.

I'm super shocked Nutanix doesn't have a higher market share in the HCI space. I figured Dell was on top but I didn't think it'd be by that much, wow!

I'm glad I'm not the only one that thinks Cisco's server management is overly complex.

That many people use Lenovo servers?!

This hyperconvergence figure was surprising to me as well. Dell seems to be benefitting greatly from having VMware under its wing. Also, Nutanix does have a stronger presence in larger organizations but smaller businesses are not taking to their offerings like they are with Dell.

Also, supporting our findings, according to 3rd-party data, Lenovo is a top 5 server manufacturer in terms of shipments worldwide.

I had responded that we had no plans to buy another server. And to my knowledge, we hadn't. However, I arrived at my office today to discover that the server that had been ordered without my knowledge had arrived. Lol

I had responded that we had no plans to buy another server. And to my knowledge, we hadn't. However, I arrived at my office today to discover that the server that had been ordered without my knowledge had arrived. Lol

Not surprised Dell is at the top of the heap. What stands out for me is their support. They've also go the easiest to navigate web site. Most of the time you can easily find drivers, instructions, specs and almost anything on their site. All you need is a service tag. Not so easy for the other brands.

Great read! I found this very interesting. My background is mostly in business administration, and have only been in IT for a couple of years, so this was great for me to read on multiple levels. Thanks!

We are an all-HPE shop here, mostly due to Dell treating our company like garbage years ago. Nothing against them now (easily best website, support, etc), just easier to stay HPE since it's all already here.

We do have a couple stray Dell PowerEdge servers in the building and I do like them. That said, I really like HP's servers.

Main point of purchasing these days is for virtualization. We don't buy boxes for individual purposes much anymore.

Dell support even with us being in the middle of no where, is almost always next day. The different types if drive format data was interesting, I wonder how many years it will be before you only see SSD or something that doesn't require magnets and spinning platters.

I blame Supermicro's ordering process. It's a bit confusing at first, but I do love their hardware.

I've built my own servers with SuperMicro components, but I never ordered an entire server directly from SuperMicro. We have however ordered from a company called "ThinkMate" which is basically a SuperMicro reseller, and they make the process pretty easy.

HP has really been constantly going downhill. 10 years ago they were the only choice we considered. Now they are not even an option. Dell really set themselves up to be the best option in the category. Also, their servers look shiny and who doesn't want a badass looking rack? ;)

It's rather funny how dramatically my opinions of Dell increased going from consumer support to RMS to a full fledged enterprise team member.

They are the epitome of 'you get what you pay for' - I really developed a severe distaste for Dell desktops and laptops in the consumer space, but as an IT professional rather than a qusi-geek-squad-guy, when you shell out for the enterprise support they're freaking amazing, and when you've got a budget that supports Dell's high end professional offerings, they're worth every penny.